Author Topic: PETRONAS  (Read 18306 times)

Offline king

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Re: PETRONAS
« Reply #100 on: February 23, 2017, 06:43:03 AM »



Wednesday, 22 February 2017 | MYT 5:09 PM
Petronas, Saudi Aramco may sign new deal on refinery project
image: http://www.thestar.com.my/~/media/online/2017/01/22/12/13/saudi-aramco.ashx/?w=620&h=413&crop=1&hash=4939AD9B1D06354FB9D9DE3DC49EDCE306BAE010

 
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) and Saudi Aramco are expected to sign an agreement to collaborate in the country's Refinery and Petrochemical Integrated Development (RAPID) project, two industry sources said on Wednesday.

Aramco had decided to suspend its partnership with Petronas in the refining and petrochemical complex in the southeast of the country, according to sources last month.

The signing is expected to take place on Monday, said one of the sources with knowledge of the matter who declined to be identified, during a visit by Saudi Arabia's King Salman to Malaysia.

Saudi Aramco declined to comment and Petronas was not immediately available for comment. - Reuters

Read more at http://www.thestar.com.my/business/business-news/2017/02/22/petronas-saudi-aramco-may-sign-new-deal-on-refinery-project/#8r32Cl8E411cP28S.99

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Re: PETRONAS
« Reply #101 on: February 25, 2017, 06:51:08 AM »



Friday, 24 February 2017 | MYT 6:17 PM
Petronas, Saudi Aramco to ink deal during Saudi King's visit
image: http://www.thestar.com.my/~/media/online/2016/10/26/05/35/petronas-logo.ashx/?w=620&h=413&crop=1&hash=B0BA5ACB3BB25A8897D773AFDB3729FF674DF8F9

 
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) and Saudi Aramco will sign an agreement during a weekend visit by Saudi Arabia's King Salman Bin Abdulaziz Al-Saud to Malaysia, Prime Minister Datuk Seri Najib Razak said in a statement on Friday.

"During His Majesty King Salman's visit, we will be signing a number of new agreements and memorandums of understanding.

“One of these will involve two of our largest state-owned companies, Saudi Aramco and Petronas. These agreements will benefit our countries and our peoples," he said in a statement posted on the Prime Minister's Office website.

Najib said the visit by was at the invitation of Kebawah Duli Yang Maha Mulia Seri Paduka Baginda Yang Di-Pertuan Agong XV, Sultan Muhammad V.

“Bilateral trade between Saudi Arabia and Malaysia has been on a strong upward trajectory in recent years, increasing by 20% in 2016 alone, to a total of RM13.12bil. Today, Saudi Arabia is one of Malaysia's largest trading partners,” he said.

Reuters reported earlier this week that Petronas and Aramco are expected to sign an agreement to collaborate on a 300,000 barrel-per-day oil refinery and petrochemical complex in Malaysia's southern state of Johor that is valued at US$27bil

Read more at http://www.thestar.com.my/business/business-news/2017/02/24/petronas-saudi-aramco-to-ink-deal-during-saudi-king-visit/#MAphbJudZEBc663p.99

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Re: PETRONAS
« Reply #102 on: February 26, 2017, 07:36:29 AM »



Saturday, 25 February 2017
Let Petronas do its job
BY RISEN JAYASEELAN - RAISON D’ETRE

 
JUST about everyone in the oil and gas (O&G) sector the world over would love to do business with Petroliam Nasional Bhd (Petronas). And why not?

It is Malaysia and South-East Asia’s only Fortune 500 company, it owns all the O&G deposits in the country, has a solid balance sheet, is spread across the globe and is so professionally run that despite the oil price rout, its good rating has been maintained by international rating agencies.

In the local context, Petronas has long played a catalyst role. Preference has been given to local players, provided they come with the right expertise or partners and are willing to invest.

Those that perform well are rewarded with more contracts by the oil giant, but those that fail to perform are not and even reprimanded if need be.

And based on industry feedback, you could say that Petronas takes a soft approach to local players, meaning that it is likely to be more forgiving than other international oil giants. (So in that sense, if a local company drops out of favour with Petronas, it means that it has performed deplorably.)

A dynamic list of registered Petronas contractors exists. The problem is, there’s a large number of them who just aren’t competitive. And that’s excluding the so-called “agents” who merely hope to secure a Petronas contract typically by claiming that they are part of the elite connected personnel of the country.

Those guys have got no business being on this list. By the way, there are around 3,700 such registered contractors today. The number should be close to the 700-odd that Norway has, a country with similar-sized hydrocarbon resources as Malaysia.

The other problem is the non-competitive ones. Petronas has long called for these players to do something about that. When oil prices were high, things weren’t so obvious. But in this period of prolonged lower oil prices, it becomes very clear if contractors can’t perform up to mark, as prices of O&G services have come down to realistic levels. It’s kind of like how Warren Buffet put it: “Only when the tide goes out do you discover who’s been swimming naked”.

Of course, it’s not only local players who are trying to strike a sweet deal with Petronas.

I’m sure in the early days, when exploration expertise came mainly from the US or European firms, they negotiated better deals for themselves when they struck the production sharing contracts with Petronas. Today, the story is different, as Petronas has over the years become very adept at inking joint ventures that are not lopsided.

Just ask all the global O&G companies doing or trying to do business with Petronas today and they will tell you that the latter strikes a hard bargain.

This brings to mind recent reports speculating a deal between Petronas and Saudi Aramco, the world’s largest oil company.

There has been a fair bit of speculation surrounding Aramco inking a deal with Petronas in relation to the latter’s Refinery and Petrochemical Integrated Development or Rapid project in Pengerang, Johor. The latest is that both parties will sign an agreement on Monday during King Salman’s visit to Malaysia.

Petronas has not said anything about any potential deal with Aramco, except that it is always in talks with potential partners, but that any deal inked would have to be on Petronas’ terms. In other words, beneficial to Petronas and not lopsided, as it should be.

Petronas’ president and CEO Datuk Wan Zulkiflee Wan Ariffin recently told editors in Kuala Lumpur that Petronas never takes on projects with the view that it has to depend on investors for funding to complete the project.

That said, partnering Aramco should have its benefits, considering it is not only the company with the vastest oil reserves, but also the most valuable company in the world today. The deal just has to be struck on equally beneficial terms.

It is also clear that Petronas is still in a decent financial state, with Fitch recently affirming its A- rating on the oil giant.

Petronas also has around RM130bil in cash. Hence, it should not be nudged into any deal that is not on its terms. Some other countries have seen the well-connected get their hands on the kitty of their rich Government-owned companies. Let this not happen to Petronas.

Remember the spirit of the formation of Petronas? It was created by virtue of the Petroliam Development Act of 1974, which wrested control of all the country’s O&G resources into Petronas for the benefit of all Malaysians.

In other words, the O&G resources of the country belong to all Malaysians, and they have to be handled with care


Read more at http://www.thestar.com.my/business/business-news/2017/02/25/let-petronas-do-its-job/#iqMUqzARIHSZqeyZ.99

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Re: PETRONAS
« Reply #103 on: February 27, 2017, 07:18:31 PM »



国內  2017年02月27日
沙地投资308亿 柔佛建炼油厂

745
沙地投资308亿 柔佛建炼油厂

(布城27日讯 )首相拿督斯里纳吉宣布,沙地阿拉伯石油公司(Saudi Aramco)已和国家石油公司(Petronas,国油)达成协议,並將投资70亿美元(约308亿令吉)在柔佛炼油与石油化工综合计划(RAPID)下,建造一座炼油厂。

他说,双方(沙地阿拉伯石油公司和国油)在今早已达致协议,並会在明天签署合作协议,而投资详情也將在明日公佈。

他形容,这是一个富有巨大意义的投资,而70亿美元的投资也是有史以来,单一投资者在大马所作出的最大单一投资。

纳吉今日是与沙地阿拉伯国王沙尔曼及代表团进行双边会谈后,在新闻发布会上宣布这项好消息。


他说,由此可见,大马和很多国家的关係都很好,而沙地阿拉伯国王沙尔曼也对此合作感到满意。

「当我们到中国吸引投资者时,有人说我们是在典当国家主权;那现在沙地阿拉伯的投资者来投资时,他们是否也要指责我们在典当国家主权?」

纳吉强调,这和典当国家主权无关,这是投资的问题,如果投资者来我国投资,將能巩固马幣匯率,强化我国的经济及带来就业机会。

早前,沙地阿拉伯石油公司和国油公司以联营伙伴关係展开討论,计划建设一座每天处理量可达30万桶原油的炼油厂,以及年產量达770万公吨的石化设施,而沙地阿拉伯石油公司將拥有这项计划的50%股权。

不过,《彭博社》却在上个月引述知情人士指出,沙地阿拉伯石油公司將退出国油旗下总值900亿令吉的柔佛炼油与石油化工综合计划(RAPID),后者將自行融资和独力完成该计划。

而《华尔街日报》也引述3名消息人士指出,沙地阿拉伯石油公司已经决定放弃参与国油公司领军的炼油与石油化工综合计划

Offline king

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Re: PETRONAS
« Reply #104 on: February 28, 2017, 07:37:59 PM »



沙地阿美与国油
签318亿RAPID股权收购协议
467点看 2017年2月28日
 
沙地阿美(左)与国油签署价值RAPID计划股权收购协议。

(吉隆坡28日讯)沙地阿拉伯石油公司(Saudi Aramco)与国家石油(PETRONAS)今日正式签署价值高达70亿美元(318亿令吉)的柔佛炼油与石油化工综合发展(RAPID)计划股权收购协议(SPA)。


首相署部长拿督阿都拉曼达兰指出,完成交易后,双方在RAPID计划下的特定投资及资产拥有平等的持有权。

在这项计划下沙地石油将提供炼油厂70%原油原料供应,国油则供应天然气、能源及设备。

尽管上月盛传沙地石油放弃与国油联营RAPID计划,惟两国代表今日齐齐否认此事。

阿都拉曼达兰说,在谈判过程中,双方不曾放弃联营;沙地石油主席兼总执行长阿敏纳西尔说,谈判一直都在进行中,

沙地能源、工业及矿资源部长兼沙地石油公司董事局主席法力赫也强调,这是该国的最终投资决定。


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Offline king

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Re: PETRONAS
« Reply #105 on: March 05, 2017, 08:58:35 PM »



2017-03-05 19:58
郭晓芳.国油迎财神?
感谢阿拉伯国家石油公司沙地阿美的投资眼光,与国油强强联手打造边佳兰综合炼油中心(RAPID),让该计划柳暗花明又一村,重现曙光,也让国油暂时松了一口气,不再为钱而头痛。为何这么说呢?这得从国油捉襟肘见的现金流说起,才会让外资有机可趁,拿走RAPID计划部份投资资产近半数股权。
感谢阿拉伯国家石油公司沙地阿美(Saudi Aramco)的投资眼光,与国油强强联手打造边佳兰综合炼油中心(RAPID),让该计划柳暗花明又一村,重现曙光,也让国油暂时松了一口气,不再为钱而头痛。

广告

为何这么说呢?这得从国油捉襟肘见的现金流说起,才会让外资有机可趁,拿走RAPID计划部份投资资产近半数股权。

根据分析报告,国油2016年9个月的361亿令吉营运现金,仅可应付359亿令吉资本开销,根本无法满足120亿令吉的派息预算,一旦无法获取资金填补这个缺口,国油就须打破扑满,动用现金储备金应急。

不过,如今喜获财神爷沙地阿美注资70亿美元支援,国油资本开销负担显著减轻,当中省下来的开销,料让国油能够继续派息给政府,无需落魄到挖老本这么凄惨。

说起国油,今天会落得“出卖”资产半数股权套利的下场,油价走疲是最大因素,但也不可否认,大马政府及国油在规划如此大型发展计划时,资金管理不够全面,看漏了油价从高点滑落后,集团必须面对的现金困局及经济局势。

当务之急,最具效率的解决方案是引进外资,但有得必有失,天下没有白吃的午餐,外资也不会善良到无条件提供资金,总要有一些交换条件让他们得益。

国油及沙地阿美如何谈妥条件,只有双方高层及领导人才知道,但以一般人的角度来看,国油是因为急需用钱而让步,把未成型的资产分一半给外人。



不卖GSC 郭鹤年公司:不缺钱

广告

 
这是否也意味,油价若一直处于每桶50美元水平或跌至更低,为了让RAPID能够如期投运或减轻资本开销负担,未来国油会继续开启机会,让更多外资参与该计划?比如最近积极在大马掘金的中国?

这可能吗?谁也无法排除其可能,以国油现在的状况,大马政府没理由拒绝财神爷送钱,更不愿意RAPID计划半途而废。

眼看该计划未跑先摔,谁不跳脚,这可是影响千千万万人饭碗的大型计划,一旦胎死腹中,受害的不只是国油和政府,还有因这个计划而衍生的各种经济生态,包括产业、填土工程、工业区、制造商、服务供应商等相关领域。

所以说,政府会置之不理吗?除非油价突然大涨,国油才有拒绝的理由。

文章来源:
星洲日报‧投资致富‧投资茶室‧文:郭晓芳‧2017.03.05

Offline king

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Re: PETRONAS
« Reply #106 on: March 15, 2017, 07:03:56 AM »



Petronas posts RM11.26b profit in Q4
Posted on 15 March 2017 - 05:36am
Lee Weng Khuen and V. Ragananthini
sunbiz@thesundaily.com
Print
KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) swung into the black for the fourth quarter (Q4) ended Dec31, 2016, registering a net profit of RM11.26 billion against a net loss of RM2.96 billion in the previous corresponding period, driven by lower net impairment on assets and production costs.

Revenue, however, contracted 2.5% from RM60.1 billion to RM58.6 billion, on the back of lower average realised product prices.

Brent crude prices averaged US$49.46 a barrel for Q4 compared with US$45.85 a barrel in Q3.

For 2016, Petronas’ net profit expanded 12.7% from RM20.86 billion to RM23.51 billion in the previous year on the back of a 17.3% rise in revenue from RM247.66 billion to RM204.91 billion. It made a total impairment on assets of RM12.9 billion in 2016.

Speaking at a press conference yesterday announcing the 2016 results, Petronas president and CEO Datuk Wan Zulkiflee Wan Ariffin said the outlook for the industry remains uncertain while maintaining his projection of an average oil price of US$45 a barrel this year.

“I’m not sure the worst is over or not, but we’re preparing ourselves for the uncertainties, especially in the second half,” he explained.

Petronas will pay RM13 billion in dividend to the government for 2017, as promised.

Zulkiflee said the company’s plans for capital expenditures investments have never been adjusted or disrupted because of dividends.

With a strong balance sheet, Petronas is not only confident on its ability to payout the committed amount, but also to cover all of its capital expenditure (capex), and is equipped with enough cash reserves to cover any additional expenditure that crops up.

The capex allotted for this year is RM 60 billion.

When asked if there will be any deferment in projects due to more stringent cost management, Zulkiflee said projects that have already been sanctioned, encompassing of 60% of the bulk expenditure for this year, will not be deferred.

Net profit for the upstream segment jumped 94% from RM1.7 billion to RM3.3 billion, with a total upstream production of 2.36 million barrels of oil equivalent (boe), 3% higher than the 2.29 million boe in 2015.

For the downstream segment, Petronas recorded a slight drop in net profit from RM8.4 billion to RM8.3 billion despite depressed market growth.

Zulkiflee said, the group will not undertake any major restructuring this year, but it will still be a high performing, merit-based organisation.

“If there is any optimisation of manpower this year, it will be based on performance. For non-performers, as usual, they have programmes for them which will result in outplacement.”

According to Zulkiflee, a total of 2,300 staff were affected under the headcount optimisation programme last year.

Going forward, he said, Petronas is open to more strategic partners for its Pengerang Integrated Complex, which is close to 60% completion as at February this year and is on track to commence operations by 2019.

Last month, Petronas sealed a deal with Saudi Aramco which will see the latter taking up a 50% stake in Rapid for US$7 billion (RM31 billion). Rapid CEO Sazali Hamzah was quoted as saying Petronas Chemicals Bhd was in talks with Asian and European petrochemical firms to invest in the project.

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Re: PETRONAS
« Reply #107 on: March 15, 2017, 11:05:21 AM »



Wednesday, 15 March 2017 | MYT 10:27 AM
Malaysia's Petronas sets March crude price factor at $4.20/bbl
image: http://www.thestar.com.my/~/media/online/2015/07/28/00/57/petronaslogob2.ashx/?w=620&h=413&crop=1&hash=8C1A69AD4AE99D9B6BDA17347CD8C4ACB14FA542
The monthly price factor is added to the average of Platts' dated Brent prices published in the month to derive the Malaysian crude official selling price (OSP).
The monthly price factor is added to the average of Platts' dated Brent prices published in the month to derive the Malaysian crude official selling price (OSP).
 
SINGAPORE: State oil firm Petronas on Wednesday said it had set the price factor for Malaysian Crude Oil (MCO) for March at $4.20 per barrel, unchanged from the previous month.

The monthly price factor is added to the average of Platts' dated Brent prices published in the month to derive the Malaysian crude official selling price (OSP).

Petronas changed its OSP mechanism from January 2017, basing its benchmark price on a basket of four Malaysian crude grades Labuan, Miri Light, * and Kimanis. - Reuters

Read more at http://www.thestar.com.my/business/business-news/2017/03/15/petronas-sets-march-crude-price-factor/#Cvs6rzbJpkwiyxtR.99

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Re: PETRONAS
« Reply #108 on: March 20, 2017, 02:21:45 PM »



SUNDAY, MARCH 19, 2017

PETRONAS CEO Wan Zulkiflee May Be Sacked, And An EPF Bail Out Of RAPID Likely The Implications Of PM Najib's Claims Of Economic Sabotage
By Ganesh Sahathevan


“We never take on a project with the view that we have to depend on investors for funding to complete the project,” Wan Zulkiflee told senior editors at a briefing.




While PM Najib provided no evidence of who exactly "almost sabotaged" the Aramco-Petronas JV,we do know that  Petronas CEO and President Datuk Wan Zulkiflee Wan Ariffin himself expressed concerns about the JV just two days before signing, and he did so publicly ,via a press conference that he himself called.The Star reported these matters:

Wan Zulkiflee expressed surprise at the report of Saudi Aramco pulling out of Rapid when it had not gone into any agreement with the entity from Saudi Arabia.
“How can there be a situation of a party pulling out of something when the party was not part of it in the first place?” he said referring to reports of Saudi Aramco supposedly pulling out of Rapid.
“From day one, we have stated that we are able to fully fund Rapid. We are and will not be dependent on anyone for this project. We are close to 60% complete, costs are within projections and the refinery will be ready by 2019 followed by the petrochemical portion by 2020.”

The above was preceded by an earlier report in The Star,dated 25 February 2017  in which Petronas seemed to be warning off PM Najib and his government.Headlined "Let Petronas Do Its Job", the story included the following statements:

There has been a fair bit of speculation surrounding Aramco inking a deal with Petronas in relation to the latter’s Refinery and Petrochemical Integrated Development or Rapid project in Pengerang, Johor. The latest is that both parties will sign an agreement on Monday during King Salman’s visit to Malaysia.
Petronas has not said anything about any potential deal with Aramco, except that it is always in talks with potential partners, but that any deal inked would have to be on Petronas’ terms. In other words, beneficial to Petronas and not lopsided, as it should be.
Petronas’ president and CEO Datuk Wan Zulkiflee Wan Ariffin recently told editors in Kuala Lumpur that Petronas never takes on projects with the view that it has to depend on investors for funding to complete the project.
That said, partnering Aramco should have its benefits, considering it is not only the company with the vastest oil reserves, but also the most valuable company in the world today. The deal just has to be struck on equally beneficial terms.
.....the O&G resources of the country belong to all Malaysians, and they have to be handled with care.

It does appear then that it was the Petronas CEO himself who was trying to discourage Aramco, and he was not afraid of doing so publicly.

Then there is the matter of the EPF. Najib is reported to have said:

“Some unpatriotic people had spread claims that the Employees Provident Fund (EPF) was almost bankrupt and that the government was unable to pay the salaries of its civil servants.
“The Saudi Arabian government had received this wrong information about our country and thus, were quite doubtful about investing in Malaysia.
“We had to meet them and correct the facts that Malaysia is among the best countries in the world (to invest in). When they were convinced, they finally agreed to invest with us” .
However, Aramco sells its crude to Petronas, and it would,as any oil company would, be interested only in the viability of its client. If otherwise, Shell, ExxonMobil and others would not be investing in say Nigeria. Put in another way, oil companies have long ago learnt to limit their exposure to the oil assets that they deal with, managing to ring-fence these from the problems of the countries they deal with.
Therefore the matter of EPF would be of interest only if the  EPF is expected to bail-out the RAPID project, for a bail-out is what it would be.If not, the EPF would already be an investor in the project. A bail out should not be unexpected, given that the JV  agreement with Aramco seems not to involve any injection of cash.
END

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Re: PETRONAS
« Reply #109 on: March 20, 2017, 08:54:52 PM »



MONDAY, MARCH 20, 2017

Crude , no cash: Aramco does not deny that Petronas JV will not involve a cash injection - Transaction is essentially a hybrid barter deal

by Ganesh Sahathevan








As previously reported the Aramco press release concerning its JV with Petronas did not say that Aramco is investing USD 7 Billion in Malaysia.In fact it implies its participation in the Aramco-Petronas JV will be in crude oil, not cash.

The story was published after a  query was put to Aramco CEO Amin Naseer.Naseer has since been sent the article published, which he has not denied.

It appears then that the Aramco-Petronas JV is essentially a hybrid barter deal,which Aramco and Petronas have described as one where Aramco agrees to supply "up to 70 per cent of the crude feedstock requirements of the refinery. (while) Petronas, on the other hand, will supply natural gas, power and other utilities".
In addition, there appears to be some provision for Aramco to acquire a 50% stake "in selected ventures and assets of the Rapid project within Pengerang Integrated Complex."

Note that the "selected ventures and assets" are not named in the announcement.It would have been a simple matter to name the company or companies that would be acquired, but Aramco and Petronas have chosen not to do so.
Little wonder then that Petronas CEO Wan Zulkiflee chose to air his objections to the deal publicly,
For that,he is more than likely to be sacked.

END

Reference

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Re: PETRONAS
« Reply #110 on: March 24, 2017, 06:29:59 AM »



Business NewsHome > Business > Business News
Friday, 24 March 2017 | MYT 1:06 AM
Alliance of top LNG buyers to put pressure on Malaysia, others
image: http://www.thestar.com.my/~/media/online/2017/03/23/17/15/dcx_doc61hh1z2zsnd47rimb3d.ashx/?w=620&h=413&crop=1&hash=1DDFA6FD42AEFA24CBC90FAC4ADEA8BE401AFD2A
Malaysia is the world’s third largest LNG exporter - after Qatar and Australia - through Petronas’ subsidiary Malaysia LNG Sdn Bhd (MLNG). This is the MLNG Tiga plant in Bintulu, Sarawak.
Malaysia is the world’s third largest LNG exporter - after Qatar and Australia - through Petronas’ subsidiary Malaysia LNG Sdn Bhd (MLNG). This is the MLNG Tiga plant in Bintulu, Sarawak.
 
SEOUL/TOKYO/MILAN: The world’s biggest liquefied natural gas (LNG) buyers, all in Asia, are clubbing together to secure more flexible supply contracts in a move which shifts power to importers from producers as oversupply grows.

Korea Gas Corp (KOGAS) said on Thursday it had signed a memorandum of understanding in mid-March with Japan’s JERA and China National Offshore Oil Corp (CNOOC) to exchange information and “cooperate in the joint procurement of LNG.”

Together, the three companies purchase a third of global LNG production, giving them a strong hand to challenge restrictive contract terms that have squeezed buyers’ finances.

Influential buyers’ clubs are largely unheard of in commodity markets where it is the producers, such as the Organisation of Petroleum Exporting Countries (Opec), which wield power, enforcing production quotas to manage prices.

A painful period of high LNG prices before 2014 left Asian importers scrambling to contain losses and led to the first talks between India, Japan, South Korea, China and Taiwan about joint purchases.

Several joint LNG-buying deals have been set up since then but none approach the scale of the latest agreement, which is the first involving the game’s biggest players.

Under Thursday’s agreement, the buyers aim to extract concessions from producers that would give them supply flexibility, such as having the right to re-sell imports to third parties, something they are not allowed to do currently under so-called destination restrictions.

“We have created a platform to share, discuss and solve our common issues such as traditional LNG business practices, including destination restrictions,” said JERA spokesman Atsuo Sawaki.

The alliance of three big buyers across three countries will put pressure on exporters such as Qatar, Australia and Malaysia.

They prefer to have clients locked into fixed supply contracts which run for decades and make buyers take fixed amounts of monthly volumes irrespective of demand, with no right to re-sell surplus supplies to other end-users.

‘Market crunch’

The agreement has been helped by the fact the power wielded by Opec is unparalleled in the commodities world. Attempts to create an Opec-style body through the Gas Exporting Countries Forum has failed to gain traction because gas and LNG markets are more fragmented than oil, while similar moves in coffee, railroads, rubber and tin have all collapsed over the decades.

The LNG market is undergoing huge changes as the biggest ever flood of new supply is hitting the market, with volumes coming mainly from Australia and the United States.

JERA, KOGAS and CNOOC will all struggle with having excess supplies in the next few years, sources at three major LNG producers told Reuters, curbing the consortium’s ability to strike any new deals this decade.

Reworking existing deals, however, is feasible and may hit the world’s biggest producer Qatar the hardest as many of its mid-term supply deals with Japan start to expire from around 2023, industry sources said.

A senior Qatar Petroleum official hinted that buyers - emboldened by temporarily oversupplied markets to demand better terms - may come to regret their actions when the cycle turns.

“Right now the market is over-supplied but if we went into a period of a tighter market, how would these buyers organisations hold up? That is an important question,” the official said.

“If there is a market crunch and gas tightens it could recreate incentives for buyers to lock in long-term contracts.” More practically, the deal complements the buying habits of each company - KOGAS largely buys for winter, CNOOC for summer and JERA across both seasons - offering opportunities for swapping cargoes, industry sources said.

“Flexibility is becoming critical for LNG buyers ... as the rise of solar capacity is going to make consumption of LNG more seasonal,” said Kerry Anne Shanks, head of LNG research for Asia/Pacific at Wood Mackenzie.

Pressure on producers

New production has resulted in global installed LNG capacity of over 300 million tonnes a year, while only around 268 million tonnes of LNG were traded in 2016, according to Thomson Reuters data.

That has helped pull down Asian spot LNG prices (LNG-AS) by more than 70% from their 2014 peaks to US$5.65 per million British thermal units (mmBtu).

It has also given importers more suppliers to choose from, putting pressure on major producers like Royal Dutch Shell, Chevron, ExxonMobil and Woodside Petroleum to grant more flexible contract terms.

Companies forming cartels are difficult to challenge at the World Trade Organisation, which does not have rules about anti-competitive behaviour and only governs trade relations between member countries. But WTO rules do oblige state-run firms to trade on commercial and non-discriminatory terms.

Thomas Cottier, a law professor and senior research fellow at the World Trade Institute at the University of Bern, said the LNG alliance may or may not comply with the WTO rules.

“To the extent that governments are directly or indirectly involved, it may violate rules on state trading or the prohibition to encourage voluntary export restraints. However, conduct of private companies is subject to domestic anti-trust law and is not part of WTO law,” he told Reuters by email.

Even if an LNG supplier such as Qatar, Russia or Australia launched a dispute at the WTO, several other major gas producers such as Iran and Turkmenistan are not members of the WTO and therefore have no right to have their complaints heard there. - Reuters
TAGS / KEYWORDS:

Read more at http://www.thestar.com.my/business/business-news/2017/03/24/alliance-of-top-lng-buyers-to-put-pressure-on-msia-and-others/#JWV3AhWBYq1RMZ5M.99

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Re: PETRONAS
« Reply #111 on: March 27, 2017, 06:11:20 AM »



TOP STORIES
Edge Weekly
Petronas says RM200b 'forgone revenue' from selling natural gas cheaper in Malaysia
By Chong Jin Hun / theedgemarkets.com   | March 25, 2017 : 9:57 AM MYT   
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KUALA LUMPUR (March 25): Petroliam Nasional Bhd (Petronas) has forgone more than RM200 billion in revenue from selling natural gas in Malaysia at rates lower than global prices since the country regulated prices of the fuel after the 1997/1998 Asian financial crisis.

The Edge Malaysia business and investment weekly (Edge Weekly) in its latest March 27 to April 2 issue, quoted Petronas president and group chief executive officer Datuk Wan Zulkiflee Wan Ariffin as saying despite Malaysia revising the price of natural gas upward every six months, the local rate was still below the international price.

“I think the forgone revenue since we started is more than RM200 billion because we have not been able to sell natural gas at market value. In the past, we made investments just to ensure security of supply. But moving forward, there is this perennial issue of non-market pricing.

“Now we have a RM1.50 increase every six months. The last increase was in January but the next increase has not been confirmed yet.

We really hope the six-month increase will continue because that will lead us to market pricing in the end," Wan Zulkiflee said.

Natural gas prices are based on one million British Thermal Units (MMBTU) terms. Bernama reported that the government raised the price of natural gas in Peninsular Malaysia by RM1.50/MMBTU to RM18.20 for the January-July 2016 period from RM16.70 in July to December 2015.

For the January-July 2016 period, it was reported that Tenaga Nasional Bhd paid RM15.20/MMBTU for the first one billion of standard cubic foot (Bscf) per day versus Petronas' liquefied natural gas market price at RM46.041 for October to December 2014.

The latest Edge Weekly issue quoted Wan Zulkiflee as saying Petronas was talking to the Malaysian Government, Energy Commission and Tenaga to continue the natural gas price adjustments and set a minimum gas demand at 800 million of standard cubic feet (MMscf) per day.

Wan Zulkiflee said Petronas needed to be "assured of minimum offtake so that we can invest further to ensure security of supply." "We can’t be investing if the offtake falls to, say, 300 MMscf per day when we are supplying 1.2 billion Bscf per day." he said.

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Re: PETRONAS
« Reply #112 on: April 11, 2017, 08:38:10 PM »



Tuesday, 11 April 2017
Oil majors eye Petronas’ stake
BY AFIQ ISA

 
European and Japanese firms express interest in purchasing 49% stake in largest gas field off Sarawak worth US$1bil

PETALING JAYA: Petroliam Nasional Bhd’s (Petronas) proposed sale of a stake in a gas field offshore Sarawak has attracted the attention of several oil majors, with bids expected in the next few weeks.

The sale of a 49% stake in the SK316 gas block is estimated at US$1bil and it has caught the interest of some of the biggest oil and gas (O&G) companies in the world due to the potential cyclical upturn in oil prices.

Industry officials said that the strong interest was on the basis of the reserve size of the block – said to be one of the largest in the region.

The Kasawari field was among the two major gas discoveries made by Petronas in Block SK316 in 2012. According to previous estimates by Petronas, the recoverable hydrocarbon resource for the field is just over three trillion standard cubic feet.

Should it go through, the stake sale would mark the oil giant’s second major billion-dollar deal this year.

It had in principle secured a US$7bil commitment from Saudi Aramco in February to invest in its Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor. Details are expected to be firmed up this year.

According to Reuters, Petronas has pitched the stake to potential bidders which included Royal Dutch Shell, ExxonMobil Corp, Thailand’s PTT Exploration and Production (PTTEP) as well as Japanese firms, citing sources.

If successful, the deal could mark Petronas’ biggest upstream stake sale since oil prices started declining more than two years ago. Petronas is targeting to lower operating expenses, cut jobs and roll back projects to help it navigate through the low oil price environment.

The state-owned O&G company has approached about a dozen prospective buyers including global oil majors and Asian firms focusing on South-East Asia, said the sources who declined to be identified as the talks are private.

They said Petronas has begun providing financial and operational data to the companies.

Citing sources, Reuters reported in February that Petronas was considering selling a stake of as much as 49% in the SK316 offshore gas block in Sarawak.

In a statement to Reuters, Petronas said that through its subsidiary, Petronas Carigali Sdn Bhd, it is looking for partners who can bring the technology and capabilities to explore, develop and efficiently operate the various fields and opportunities in the offshore gas block.

“We are confident that we will attract the right partners to maximise the potential value of these opportunities to help meet the world’s growing O&G demand,” Petronas said.

It was not immediately known what the individual companies’ responses to Petronas’ approach were.

ExxonMobil declined to comment, while Shell referred the query to Petronas. A spokeswoman for PTTEP declined to comment on the deal, but said the company was keen to invest in South-East Asia because it had expertise in the region, where cost and risks were low.

Like most oil majors, Petronas has been on a cost-cutting spree to match its operating expenditure and cost to the lower average cost of crude oil. Apart from cost cutting, it has been focusing on conserving cash flows to meet its capital commitments.

Among the large capital commitments is an estimated sum of RM60bil for the Rapid project. Petronas has always maintained that it was open to having joint-venture partners for its capital-intensive projects. However, the partners have to come on the terms set by the national oil company.

The same terms are expected to be set in selecting the partner for the SK316 O&G field.

TAGS / KEYWORDS:
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Read more at http://www.thestar.com.my/business/business-news/2017/04/11/oil-majors-eye-petronas-stake/#qih9EirlQXOfwV2k.99

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Re: PETRONAS
« Reply #113 on: April 12, 2017, 08:56:27 AM »



2017-04-11 17:12
传国油售天然气业务.估值44.4亿
消息人士披露,国家石油(Petronas)准备脱售一项上游天然气项目的部份权益,预计价值10亿美元(约44亿4000万令吉)左右,投标买家包括皇家荷兰蚬壳石油、埃克森美孚公司、泰国PTT探测与生产公司,以及日本一些企业。
(吉隆坡11日讯)消息人士披露,国家石油(Petronas)准备脱售一项上游天然气项目的部份权益,预计价值10亿美元(约44亿4000万令吉)左右,投标买家包括皇家荷兰蚬壳石油、埃克森美孚公司、泰国PTT探测与生产公司,以及日本一些企业。

广告

《路透社》报道,熟悉事件的人士指出,假如成功敲定交易,这可能是国油在油价两年前开始下跌至今,规模最大的上游业务脱售计划。国油期望调低营运开销和裁员,并撤回一些计划,以撑过油价偏低的过度期。

消息人士指出,这家国营石油与天然气公司曾接洽多名潜在买家,包括跨国石油公司,以及专注东南亚市场的亚洲企业。他们不愿透露姓名,因为这些洽商尚未公开。

他们表示,国油已开始提供金融与操作方面的数据给潜在买家,预期接下来几周可接获他们的投标。

《路透社》2月曾引述消息人士报道称,国油考虑出售砂拉越州SK316岸外天然气资产高达49%的股权。

国油在发给《路透社》的文告中表示,子公司国油勘探(Petronas Carigali)正寻求合作伙伴,以便为旗下多座油气田提供探测、开发与高效的科技,并为SK316岸外天然气田寻找投资机会。

国油表示:“我们相信可以吸引适合伙伴,充份掌握这些机会的潜在价值,协助迎合世界市场对石油与天然气的增加需求。”


绿盛世国际宣布上市第一炮

广告

泰国PTT探测与生产公司表示,该公司热衷于在东南亚投资,因为拥有在本区域投资的经验、成本与风险相对较低,其他公司皆不愿置评。

文章来源:
星洲日报

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Re: PETRONAS
« Reply #114 on: April 17, 2017, 11:15:51 AM »



Selling off Sarawak’s oil and gas assets: Myth or reality?
April 17, 2017
Petronas is seeking to sell a stake in a major oil and gas reserve off the coast of Sarawak, and what should the state be doing about it.
COMMENT
sarawak_petronas_6001By Suarah Petroleum Group
The news
Reuters on Feb 20, 2017 reported in Singapore that Petronas is aiming to sell its 49% stake in the SK316 offshore gas block in Malaysia’s Sarawak for up to US$1 billion (RM4.41 billion) seeking to raise cash and cut development costs. According to its sources, Petronas is said to be working with an investment bank on the stake sale and the process was kicked off in February 2017.
On Feb 21, 2017, The Star reported that Petronas president and CEO Wan Zulkiflee Wan Ariffin had denied the report that it was considering selling its stake in the SK316 offshore gas block in Sarawak to raise cash, adding that Petronas had a cash balance of RM130 billion and that there was no need to sell to get money.
Block SK316, located approximately 180km North of Bintulu, Sarawak, is operated by Petronas and contains a number of gas fields including the NC3 field which feeds Malaysia’s liquefied natural gas (LNG) export project, known as MLNG Train 9.
In 2011 and 2012, Petronas reported that Kasawari-1 and NC8SW-1 were the latest wells drilled in Block SK316 and were significant gas discoveries. The Kasawari field had over five trillion standard cubic feet (TSCF) with an estimated recoverable hydrocarbon resource of just over three TSCF, making it one of the largest non-associated gas fields in Malaysia.
The recoverable resource for the NC8SW field is estimated at more than 450 billion standard cubic feet of gas. In late 2015, Petronas called off the tender for the Kasawari field development, a contract worth over US$1 billion that had been offered earlier. The first gas for Kasawari was initially targeted for late 2018, which is now delayed.
According to the same Reuters’ sources, the stake to be sold is expected to include a combination of the producing NC3 gas field, the potential development of the Kasawari field and other exploration acreages in the block. The funds raised could also contribute to the future development of the Kasawari field.
The reality
As far as reported in the public domain, Block SK316 is still 100% held by Petronas Carigali. While in the early 2011/12, Petronas was optimistic that it could go on its own with the development of its gas discoveries in SK316, including the over US$1 billion required for the Kasawari development.
Things started to turn south in 2015, and with the falling oil prices and dwindling cash flows added to both the increasingly technical and project development challenges for Kasawari, Petronas decided to put the project on hold.
Fast forward to 2017, where many believe that the oil and gas industry has reached its bottom and is now back on the upward trend, with time being right for oil and gas asset owners to evaluate their portfolio of assets in order to extract their maximum value.
In this case, Petronas should not be exempted in assessing its portfolio of assets and identifying those that could be “flipped” wholly or partially in return for cash or asset swaps or both. In the case of the SK316 block, where there exist producing fields, development projects and exploration options, selling a minority stake or farming out part of the PSC to others appears indeed to be an interesting option.
However, as SK316 is a gas PSC and having the NC3 field already feeding LNG Train 9, added with the technical challenges of the Kasawari field, it is expected that there will be limited candidates for the minority stake in SK316.
Nevertheless, since NC3 is already producing, it becomes an interesting option for the existing partners in LNG Train 9 and the likes of JX Nippon Oil & Energy or parties with downstream interest in Bintulu to consider the upstream options.
Another interesting aspect for the minority stake in SK316 is that as Petronas will continue to be the operator, the stake is easily “bankable” as the buyer can be a non-technical party, opening the door for pure financial investors.
This is, however, subject to Petronas’ approval.
The possibilities

Putting aside the argument of whether Petronas is selling off Sarawak’s oil and gas resources, whether illegally or unconstitutionally acquired or whether it has the right to do so by seeking investments for a minority stake in SK316, there indeed exists the potential for Sarawak (or through one of its vehicles) to consider having a substantial and more meaningful participation in the upstream PSCs, all the more where PSCs are either expiring, expired or where operators withdraw.
This has to be done through a proper oil and gas due diligence process including examination of both technical and financial aspects of the PSC.
However, the more urgent question remains whether Sarawak is content to continue to be a mere spectator, or wants to become an active participant in the development of the oil and gas resources of Sarawak.
Sarawak Chief Minister Abang Johari Openg says Sarawakians must decide their own destiny, not to have somebody else deciding for them. Thus, the state government of the day must create policies that are Sarawak-centric and focused on the immediate and strategic needs of the state, he said.
“So we are left in a situation where we have oil and gas and cannot fully enjoy the benefit of having oil and gas. This cannot be….“
He said it is therefore of strategic importance that Sarawak should try to use as much as possible of its energy resources for its own economic development and industrialization.
The “recycled” news about Petronas’ intent to divest 49% of its stake in SK316 offshore Sarawak has been making the rounds again in the local news recently. It was first reported in February 2017 and was quickly denied by Petronas.
In April, the Reuters report again resurfaced. To oil and gas industry observers, the news is a positive one as it improves the outlook of the delayed Kasawari gas project.
BMI Research was upbeat on the potential sale of equity as the bulk of the funds generated from the stake sale in the SK316 offshore gas block is expected to be used to develop the Kasawari field.
The Kasawari gas project, which is part of SK316, is a deepwater, sour gas development estimated to hold about 3.2 trillion cubic feet of recoverable gas resources.
“Despite promising below-ground prospects, development has progressed slowly due to the field’s deepwater,high-cost structure, and the relative inexperience of domestic engineering firms involving carbon dioxide removal. Potential integration of a foreign partner could dilute the project’s cost burden.
Any future gas output from Kasawari will likely be designated for exports, given Malaysia’s comfortable surplus in gas,” the research house said in a statement.
We believe that Petronas’ search for a potential foreign partner in the project is not unreasonable, but nevertheless it should be looking closer to home, to the real owner of those assets.
Therefore, the news of the proposed sale is indeed a sour note for Sarawakians. It would appear that Petronas is not responding to the state’s concern to increase its participation and may even be sabotaging such efforts.
What is in such a sale for Sarawak?
Echoing the sentiments of Abang Johari, any proposed “sale” of Sarawak oil and gas assets by the party that was supposed to have the “vested interest” of Sarawak in mind without the apparent knowledge of the government and people of Sarawak shows the “tidak peduli” attitude of the parties involved.
Or more intriguing than this, questions may be raised as to why it is only Sarawak’s oil and gas assets that are the prime target for such selling off and could Petronas be undertaking a back door sale of Sarawak’s oil and gas assets as an exit strategy before the state can get its hands back on those assets?
Also, would not such sales reduce further even the measly royalties that Sarawak is now getting? Would such sales by Petronas while negotiations are ongoing with the state government in regard to devolution and return of those assets not be in bad faith?
These questions notwithstanding, instead of dwelling on the negatives, Suarah Petroleum Group would like to propose that in the period where devolution of authorities and negotiations on oil and gas rights are taking place between the state and Federal governments, a joint oil and gas development authority (Jogda) be created comprising the Federal government, the state government and Petronas, where all strategic matters concerning Sarawak’s oil and gas matters, including new PSC awards, and sale or transfer of interests, are deliberated.
‘Saya Peduli’
There are many experienced and qualified Sarawakians willing to lend their expertise to assist and support the government of Sarawak in the setting up of Jogda in the spirit of “Saya Peduli” in maximising Sarawak’s socio-economic benefit and safeguarding its rights in the oil and gas industry for its present and future generations.
Sarawak must not lose any more of its precious oil and gas assets to self-serving rent-seekers. Until and unless Sarawak takes firm and decisive action, we remain mere spectators at the mercy of others.
Suarah Petroleum Group is a think tank comprising Sarawakian professionals in the oil and gas industry.
With a firm belief in freedom of expression and without prejudice, FMT tries its best to share reliable content from third parties. Such articles are strictly the writer’s personal opinion. FMT does not necessarily endorse the views or opinions given by any third party content provider.
 

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Re: PETRONAS
« Reply #115 on: April 23, 2017, 07:12:27 AM »



MONEY

Petronas denies selling stake in US$1b Miri offshore project
BY SULOK TAWIE
Published: April 22, 2017 04:38 PM GMT+8

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Petronas dismissed today’s reports that it is selling its stake in the SK316 offshore gas block off Miri’s coast. — Picture courtesy of petronasofficial.com
Petronas dismissed today’s reports that it is selling its stake in the SK316 offshore gas block off Miri’s coast. — Picture courtesy of petronasofficial.com
KUCHING, April 22 ― National oil and gas giant Petroliam Nasional Bhd (Petronas) dismissed today’s reports that it is selling 49 per cent of its stake in the SK316 offshore gas block off Miri’s coast, for up to US$1 billion to raise funds for development costs.

Petronas president and chief executive officer Datuk Wan Zulkiflee Wan Ariffin said Petronas is only looking for partners to invest in exploration and extraction of gas from the block, not sell its stake.

“We are not selling our stake as widely reported by the media, but seeking partners to explore and extract the gas,” he told reporters after witnessing the signing of an agreement and memorandum of understanding between the oil company and Yayasan Hartanah Bumiputera Sarawak (YHBS) here.

He said Petronas needs partners who have the technology that can crack carbon dioxide and sulphur from the gas in block SK316.

He said block SM316 is tested to have high content of carbon dioxide and sulphur.

According to him, block SK316 has about 12 trillion cubic metres of proven and probable gas reserves.


“We have yet to get the right partner to invest in the exploration and extraction of the gas from block 316,” he added.

Sarawak Chief Minister Datuk Amar Abang Johari Openg, who was present at the press conference, said the state government was consulted by Petronas on the move to seek partners.

“Petronas has even told us of the high risk involved in investing SK316 due to the presence of the high percentage of carbon oxide and the returns on investment is not assured,” he said, pointing out that it is better for Sarawak to invest in other ventures with Petronas.

The chief minister reminded state-linked think-tank Suarah Petroleum Group, and both state Opposition and Barisan Nasional politicians not to be emotional when issuing statements on the project.

He said Petronas has always consulted the state government in the exploration and extraction of oil and gas in Sarawak’s territorial waters.

“There are a lot of things that we have discussed with Petronas that I cannot simply reveal to the public,” he said.

The agreement and the memorandum of understanding is for Petronas to support the development and growth of the petrochemical industry in Sarawak.

The agreement relates to the key terms for the supply of 140 million metrics standard cubic feet per day to YHBS’s proposed methanol plant at Tanjung Kidurong, Bintulu, that will produce methanol and methanol derivatives.

The agreement is a prelude to the Gas Sales Agreement to be signed at a later date

- See more at: http://m.themalaymailonline.com/money/article/petronas-denies-selling-stake-in-us1b-miri-offshore-project#sthash.uG7Z38ea.dpuf

Offline king

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Re: PETRONAS
« Reply #116 on: July 27, 2017, 01:44:05 PM »




Business NewsHome > Business > Business News
Thursday, 27 July 2017
Petronas likely to take a hit, may make provisions
BY EUGENE MAHALINGAM

image: http://www.thestar.com.my/~/media/online/2016/10/26/05/35/petronas-logo.ashx/?w=620&h=413&crop=1&hash=B0BA5ACB3BB25A8897D773AFDB3729FF674DF8F9
Petronas, however, told StarBiz that it would continue with its long-term strategy of developing its oil and gas asset in Canada through wholly owned subsidiary Progress Energy Canada Ltd, which was acquired in 2012 for C$5.5bil. Progress Energy is the largest holder of contiguous land in the North Montney area which has rich resources of natural gas.
Petronas, however, told StarBiz that it would continue with its long-term strategy of developing its oil and gas asset in Canada through wholly owned subsidiary Progress Energy Canada Ltd, which was acquired in 2012 for C$5.5bil. Progress Energy is the largest holder of contiguous land in the North Montney area which has rich resources of natural gas.
 
PETALING JAYA: Petroliam Nasional Bhd (Petronas) could incur an impairment charge of about C$632mil (RM2.16bil) following its decision to abort the proposed C$36bil (RM124bil) Pacific NorthWest liquefied natural gas (LNG) project in western Canada.

The impairment, which would have an effect on the profitability of the national oil company but not its cash-flow situation, is estimated based on the provisions made by one of the joint-venture (JV) partners in the LNG project. According to wire reports, Japan Petroleum Exploration Co (Japex) that has a 10% stake in the Pacific NorthWest LNG project consortium would take a loss of about C$102mil (RM349mil) in the year to end-March following Petronas’ decision to abort its Canadian LNG project.

“Based on what Japex will provide, Petronas’ portion would be about six times the amount considering its 62% stake in the consortium,” said an industry analyst.

Petronas, however, told StarBiz that it would continue with its long-term strategy of developing its oil and gas asset in Canada through wholly owned subsidiary Progress Energy Canada Ltd, which was acquired in 2012 for C$5.5bil. Progress Energy is the largest holder of contiguous land in the North Montney area which has rich resources of natural gas.

In its reply to StarBiz, Petronas said production from the North Montney area had increased from about 200 million standard cubic feet per day (MMscfd) in 2012 to about 540 MMscfd in 2017 to supply gas to Canada’s domestic market.

“Moving forward, Petronas will continue our long-term investment strategy in Canada through our wholly owned subsidiary, Progress Energy.

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“In view of the decision on Pacific NorthWest LNG, Progress Energy will be re-aligning its strategic approach to developing the world-class North Montney gas assets with its North Montney JV partner,” it said in an e-mail reply.

Petronas also said there was no single cause or event that had resulted in the decision to scrap the project.

The Pacific NorthWest LNG project is a consortium consisting of Petronas with a 62% stake, Japex holding 10%, Petroleum Brunei 3%, Indian Oil 10% and China Petrochemical (Sinopec) 15%.

The amount expected to be impaired is far less than the RM20bil figure that a local investment house had estimated following the news that Petronas made public through a statement issued early yesterday morning.

According to a report by AmInvestment Bank, in a worst-case scenario, it estimated that the provision could go up to C$6bil (RM20bil), assuming Petronas’ interest in the entire project, including Progress Energy, is taken into account.

The research house added that TransCanada Corp, which was contracted to build the pipeline connecting gas wells to the LNG terminal, will also be reimbursed up to C$500mil (RM1.7bil) in costs already spent on the project.

The research house, however, does not expect any significant impact on the group’s capital expenditure (capex), which has been spent largely in Malaysia.

AmInvestment Bank pointed out that Petronas’ 2016 capex dropped 22% year-on-year to RM50bil, of which 80% was spent domestically.

Petronas said in the statement early yesterday that it was scrapping the western Canada LNG project due to weak global prices.

The national oil company said the decision was made after a careful and total review of the project amid changes in market conditions.

Meanwhile, in a statement, Petronas’ executive vice president/chief executive officer upstream, Anuar Taib, said: “We are disappointed that the extremely challenging environment brought about by the prolonged depressed prices and shifts in the energy industry has led us to this decision.

“We, along with our North Montney JV partners, remain committed to developing our significant natural gas assets in Canada and will continue to explore all options as part of our long-term investment strategy moving forward.”


Read more at http://www.thestar.com.my/business/business-news/2017/07/27/petronas-likely-to-take-a-hit/#d7Ls4JmIhqWv3xUO.99

Offline king

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Re: PETRONAS
« Reply #117 on: July 29, 2017, 03:32:46 PM »




Business NewsHome > Business > Business News
Saturday, 29 July 2017
Petronas' foiled Canadian dream
BY GURMEET KAURandTEE LIN SAY

image: http://www.thestar.com.my/~/media/online/2017/07/28/23/22/petronas-canadian-lng.ashx/?w=620&h=413&crop=1&hash=D8A3FBA04AD40BF347A89977AA87C3C384000439

 
Petronas may incur a write-off for pulling back from the ambitious gas pipeline project in Canada. But it had no other options, as the environment is not right for the project.

WHEN Datuk Wan Zulkiflee Wan Ariffin took over as president and chief executive of Petroliam Nasional Bhd (Petronas) two years ago, the biggest challenge he faced was to balance the cashflow of the national oil and gas company with its capital expenditure (capex).

In particular, he had to see through Petronas’ capital commitments of some RM176bil for two projects to be carried out right until 2019 – the Refinery and Petrochemical Integrated Development (Rapid) in Pengerang, Johor, and a gas pipeline cutting across Canada.

The RM60bil Rapid, which will become the largest oil and gas (O&G) hub in Asia, creating jobs and other spinoffs, has been seen as a project that the national oil company cannot afford to drop.

For one, the Rapid project has always had more certainty in the form of committed investments from other partners, approvals from authorities and seemingly minor execution risks.

The ambitious Canadian gas pipeline project, on the other hand, which would likely have been the single biggest investment by a Malaysian entity out of the country, has been fraught with challenges from day one.

image: http://www.thestar.com.my/business/business-news/2017/07/29/why-the-pullback-in-canada/~/media/b82d033ecc444e4ba971b46d8b4f562a.ashx?h=342&w=600


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The project faced a melange of issues ranging from aboriginal rights to environmental and legal challenges, not to mention the changing dynamics of the gas supply industry.

In fact, the approval given for the gas pipeline in September last year by the Canadian government came with 190 additional conditions, mainly environmental-related issues, which had to be adhered to by Petronas. This could have potentially escalated costs, say industry players.

Wan Zulkiflee took over from Tan Sri Shamsul Azhar Abbas in April 2015 when the O&G industry was spiralling down. But even then, it was a known fact that Rapid was going to go ahead. Today, Rapid is about 62% complete as of end-March and is expected to begin operations by 2019.

The fate of the C$36bil (RM124bil) Pacific NorthWest liquefied natural gas (LNG) gas pipeline in Canada, meanwhile, was largely dependent on the dynamics of the O&G prices.

Three years later, the reality is that sentiment in the O&G sector has not improved. Prices are still where they were in 2015.

So, when Petronas announced that it was not going ahead with the project in an annoucement last Wednesday, it did not come as a shock. It has been reported that Petronas would take a hit of up to US$800mil (RM3.4bil) for costs incurred in undertaking works related to the project so far.

“But the short-term pain is nothing compared to the long-term gain of not going ahead with the project,” says an executive of an O&G company.

Had Petronas gone ahead with the project, analysts have alluded that it would not have had enough cashflow to fund its capex and dividend payouts.

Moody’s Investors Service in a report last month noted that the national oil company’s cashflow from operations would not be sufficient to fund its capex and dividends.

At the time the report was issued, it had taken into consideration the possibility of Petronas undertaking the Canadian LNG pipeline project.

image: http://www.thestar.com.my/business/business-news/2017/07/29/why-the-pullback-in-canada/~/media/6aa3fc6373db49d784cd2ddb17f8eb9e.ashx


Not totally giving up

But it is noteworthy that Petronas isn’t totally giving up on its LNG ambitions in Canada that it had ventured into in 2012.

Petronas is simply realigning its strategy in that area and may team up with other oil major to build the gas pipeline in the future.

There are at least 18 proposals to build gas pipelines with terminals to export the gas in Canada, and it was a certainty that many would have failed under the current low gas price environment.

The view among industry executives is that Petronas may team up with other oil majors to build a gas pipeline cutting across that country.

In fact, Petronas itself has stated that it was still committed to its investments in Canada, held through Progress Energy Canada Ltd.

“Progress Energy will be re-aligning its strategic approach to developing its world-class natural gas assets in North Montney with its (North Montney) joint-venture (JV) partners,” Petronas says in an e-mail response to StarBizWeek.

Petronas also says that there is no need for it to write down its investment in Canada, as the assets are already producing.

“The North Montney assets are already producing and supplying natural gas (via a pipeline) to the Canadian domestic market. Its production has increased from about 200 million standard cubic feet per day (mmscfd) in 2012 to about 540 mmscfd in 2017,” it says.

It adds that it will retain its stake in Progress Energy and will also continue to explore ways to monetise its gas assets.

“From Petronas’ perspective, we see in the next 10 to 15 years, O&G will continue to be relevant in the energy market, where LNG will continue to be a preferred source of cleaner energy. Renewables will progressively continue to have their place, and we see it as a future potential for us,” says the national oil corporation.

Petronas first bought into Progress Energy for C$5.5bil in December 2012 during the tenure of Shamsul.

image: http://www.thestar.com.my/business/business-news/2017/07/29/why-the-pullback-in-canada/~/media/45988b7edbdd471c8233286c4eba86bc.ashx?h=421&w=600


The Calgary-based Progress Energy is the largest holder of contiguous land in the North Montney area, which has rich resources of natural gas.

The acquisition by Petronas was made when oil prices were around US$100 a barrel. It had raised the issue of whether it was ill-timed and if the investment was worth all that money.

Progress Energy was then a listed company in Canada, and Petronas had offered its shareholders a price of C$22 per share, which was at a hefty 90% premium over Progress Energy’s share price at that time.

Subsequently, it sold equity in Progress and the LNG project to four partners – Japan Petroleum Exploration Co Ltd (10%), Petroleum Brunei (3%), Indian Oil Corp Ltd (10%) and China Petrochemical Corp (15%). Petronas is the majority owner of the Canadian project with a 62% stake.

That move not only lowered Petronas’ cost of acquisition and future capex costs, but also ensured that the bulk of its future production from the project had ready secured buyers, as these consortium partners had agreed to offtake their respective pro-rata shares of the LNG output from the project.

Notably, the Petronas-led gas pipeline was widely viewed by Canadian industry analysts as the most promising among 20 proposals to export gas from the country’s West Coast to energy-thirsty customers in Asia.

The Petronas gas pipeline would have supplied up to 19.2 million tonnes of LNG a year, or about 8% of last year’s global trade.

It would have enabled Petronas to sell and transport Progress Energy’s shale gas assets from British Columbia to lucrative Asian markets.

When the national oil company conceived the project, LNG was in sharp demand after Japan shut its nuclear plants following the 2011 Fukushima meltdown and needed alternative power supplies. At that time, spot LNG prices in Asia rose to near US$20 per million British thermal units.

Low LNG prices making it not viable

However, basic economics no longer make the project viable.

Had Petronas proceeded with the Canadian project, more capex would have been needed and the return on investment would have been longer simply because the price of gas has declined significantly.

By scrapping the project, it can free up funds that can be channelled to higher-priority projects such as Rapid. Although Petronas only bought into Progress Energy some five years ago, technological advancements have changed the energy landscape over that short period of time. Technology has brought down the cost of producing both O&G.

Also, by the time Petronas secured the green light for the project in September last year, a lot had changed in the global LNG market

For one, LNG-AS prices had fallen more then 70% over the last two years to trade at US$8.52 as of end-May.

LNG has been historically sold in other parts of the world through long-term contracts tied to the price of oil. While natural gas does not mirror oil prices exactly, there is a general correlation, sometimes with a time lag. Another reason that may have played a factor in Petronas’ decision was that United States LNG exports had climbed to a record last year.

The country is expected to become the world’s third-largest exporter of LNG in 2018.

With budget cuts and cost reductions being undertaken by Petronas, the national oil company is now in a better position.

Moody’s notes that Petronas is expected to start reaping the benefits of its cash conservation efforts fully from 2017 onwards.

The national oil company will also benefit from a reduction in oilfield services rates and drilling costs, as it is able to renew and renegotiate its current contracts at lower rates.

Petronas’ 2016 capex dropped 22% year-on-year (y-o-y) to RM50bil, of which 80% was spent domestically.

In the first quarter to March 31, Petronas saw its operating cashflow grow 51% y-o-y to RM18bil.

As at end-March 2017, Petronas remained in a net cash position at RM59bil.

The rating agency notes that Petronas has announced measures to limit the increase in its net borrowings and protect its credit profile.

“As such, Petronas reduced its dividend payment to the Malaysian government in the course of 2016 – to RM16bil in 2016 from RM26bil in 2015. The company’s proposed dividend for 2017 amounts to RM13bil. However, as oil prices recover, we would expect the dividends for future years to increase,” the rating agency says.

Petronas’ net profit surged by more than 100% y-o-y in its first quarter ended March 31.

Moody’s expects the medium-term crude oil price band to range between US$40 and US$60 per barrel.

So, Wan Zulkiflee’s decision to pull back from the Canadian LNG project is a wise one, considering the murky outlook of the industry.

However, he has to decide on the long-term plan for Progress Energy, which is now supplying gas to the US market.

A factor that could well sway Petronas’ move to get back into the Canadian gas pipeline project is that LNG prices in Asia are higher compared to the US. So, watch this space.

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Read more at http://www.thestar.com.my/business/business-news/2017/07/29/why-the-pullback-in-canada/#p0w1X6kdZJkh2rxp.99